American Investors' Morale in France Penalized by Political Instability in 2024

A majority of them believe that the dissolution of the National Assembly in June (51%) and the fall of the Barnier government in December (78%) have negatively affected their investments in France or the attractiveness of the country, according to this survey carried out among 151 American companies representing more than 95 billion euros in turnover and 220.000 employees in France.

While the United States is the leading foreign investor, the perception of France by parent companies has deteriorated in 2024: 36% consider it good and 3% excellent, compared to 45% and 7% in 2023.

The main investment criteria mentioned are the economic context (76%), political stability (74%) and the qualification of the workforce (69%), underlines the survey carried out with the firm Bain & Company between the resignation of the Barnier government at the beginning of December and the inauguration of the American president Donald Trump on January 20, when France was still without a budget.

However, while its strengths are still cited (geographic location, quality of life, infrastructure, capacity for innovation, qualified workforce), political stability is perceived as its main weakness (79%) in 2024. This is followed by the cost of labor (78%), social legislation (72%), the social climate (71%) and the complexity of administrative procedures (69%).

These "structural obstacles" have been regularly put forward since the barometer was launched in 1999, underlines Marc-André Kamel, vice-president of AmCham and senior partner at Bain & Company.

"The basis of France's attractiveness remains there (...), provided that the reasons for which there has been a drop this year - political instability and fiscal concerns - are addressed quickly by the public authorities," he adds.

For the current year, the political environment is perceived as a moderate (47%) or significant (47%) risk factor.

While the government will relaunch the simplification project for businesses on Tuesday, 75% of investors have confidence in its ability to reform.

Regarding the United States, 50% of the companies surveyed said they feared a negative impact on transatlantic economic relations, before the intensification of the trade war.

Faced with this situation, AmCham calls for "setting a clear political and economic course", "drastically simplifying administrative procedures" or "accelerating" professional training.